Nigel Jenkinson from BoE has spoken on some issues and challenges in meeting five high-level objectives that should influence a new framework to contain system-wide liquidity risks. He discussed objectives covering:
- encouraging individual banks to manage liquidity risk prudently to be robust to firm-specific and market-wide stresses;
- regulation disincentivising banks from increasing liquidity risk;
- regulation guarding against crystallisation of system-wide liquidity risk;
- consistent global application of standards; and
- underpinning incentives for banks to manage liquidity risk prudently within the design and operation of central bank facilities.